CHAMPIONS PRINCIPLES OF REAL
ESTATE 2 CORRECT 100%
appraisal - ANSWER value of a property maybe affected by social, economic, govt and
environmental influences
Loan-to-Value Ratio (LTV) - ANSWER The percentage of value or sales price that a
lender is willing to finance.
limited appraisal report - ANSWER exterior only/drive by inspection. deemed as low risk
loan
highest and best use of property - ANSWER legal use that gives the greatest return
Principal of Contribution - ANSWER cost does not equal value
Residential Mortgage Loan Originators (RMLO) - ANSWER Must be certified licence
holders and is mandated by the SAFE ACT (TX dept of savings and mortgage lending)
Principle of Anticipation - ANSWER purchase price is affected by the expectation of
future appeal and benefits
Principal of Substitution - ANSWER value of a commodity is influenced by the cost of
acquiring subsitute or comparable item
Principal of progression - ANSWER value of properties around yours goes up; so does
yours
Principal of Regression - ANSWER The Value of more expensive home placed in a
neighborhood of less expensive homes will drop in value
Market Value - ANSWER the most probable price a property should bring in a
competitive and open market under fair conditions requisit to a fair sale.
appraisal process - ANSWER The value of a property may be affected by social,
economic, governmental and environmental influences. An appraiser must always be
aware of these influences and possible changes in them that could affect market value.
Three approaches to value - ANSWER (1) The Sales Comparison Approach
(2) The Cost Approach,
(3) The Income Approach.
, Equal Credit Opportunity Act - ANSWER federal law passed in 1974. doesn't include:
gender or immigration status. consumers are given equal chance to obtain credit.
- ANSWER
secondary market - ANSWER exists for the purchase and sale of existing mortgages to
investors
Liquidity - ANSWER provides a steady supply of funds to keep making loans
yield - ANSWER represents money earned on an investment
Fannie Mae - ANSWER began in 1938. largest investors in home mortgages in the
secondary market
Freddy Mac - ANSWER began in 1970. purchases mortgages in the secondary market
pre approval - ANSWER buyers set more realistic pricing goals, better understanding of
ability to pay, avoid showing property buyers cant afford, seller reassured buyer has
sufficient income and credit to close the deal (is the best)
loan to value ratio - ANSWER % of the lesser appraised value or sale that the lender
will lend
Private Mortgage Insurance (PMI) - ANSWER Found in conventional loans. type of
insurance required when the LTV exceeds 80%. insures the difference
government rights In land - ANSWER Police Power
Eminent Domain
Taxation
Escheat
police power - ANSWER right of government to regulate and control land. most
common example is zoning
buffer zone - ANSWER area of land separating one land use from another (single
family, apartments and retail)
eminent domain - ANSWER right of govt to take private land for public use.
inverse condemnation - ANSWER land owner sues govt to buy his land
taxation - ANSWER govt right to tax real estate
ad valorem - ANSWER according to value
ESTATE 2 CORRECT 100%
appraisal - ANSWER value of a property maybe affected by social, economic, govt and
environmental influences
Loan-to-Value Ratio (LTV) - ANSWER The percentage of value or sales price that a
lender is willing to finance.
limited appraisal report - ANSWER exterior only/drive by inspection. deemed as low risk
loan
highest and best use of property - ANSWER legal use that gives the greatest return
Principal of Contribution - ANSWER cost does not equal value
Residential Mortgage Loan Originators (RMLO) - ANSWER Must be certified licence
holders and is mandated by the SAFE ACT (TX dept of savings and mortgage lending)
Principle of Anticipation - ANSWER purchase price is affected by the expectation of
future appeal and benefits
Principal of Substitution - ANSWER value of a commodity is influenced by the cost of
acquiring subsitute or comparable item
Principal of progression - ANSWER value of properties around yours goes up; so does
yours
Principal of Regression - ANSWER The Value of more expensive home placed in a
neighborhood of less expensive homes will drop in value
Market Value - ANSWER the most probable price a property should bring in a
competitive and open market under fair conditions requisit to a fair sale.
appraisal process - ANSWER The value of a property may be affected by social,
economic, governmental and environmental influences. An appraiser must always be
aware of these influences and possible changes in them that could affect market value.
Three approaches to value - ANSWER (1) The Sales Comparison Approach
(2) The Cost Approach,
(3) The Income Approach.
, Equal Credit Opportunity Act - ANSWER federal law passed in 1974. doesn't include:
gender or immigration status. consumers are given equal chance to obtain credit.
- ANSWER
secondary market - ANSWER exists for the purchase and sale of existing mortgages to
investors
Liquidity - ANSWER provides a steady supply of funds to keep making loans
yield - ANSWER represents money earned on an investment
Fannie Mae - ANSWER began in 1938. largest investors in home mortgages in the
secondary market
Freddy Mac - ANSWER began in 1970. purchases mortgages in the secondary market
pre approval - ANSWER buyers set more realistic pricing goals, better understanding of
ability to pay, avoid showing property buyers cant afford, seller reassured buyer has
sufficient income and credit to close the deal (is the best)
loan to value ratio - ANSWER % of the lesser appraised value or sale that the lender
will lend
Private Mortgage Insurance (PMI) - ANSWER Found in conventional loans. type of
insurance required when the LTV exceeds 80%. insures the difference
government rights In land - ANSWER Police Power
Eminent Domain
Taxation
Escheat
police power - ANSWER right of government to regulate and control land. most
common example is zoning
buffer zone - ANSWER area of land separating one land use from another (single
family, apartments and retail)
eminent domain - ANSWER right of govt to take private land for public use.
inverse condemnation - ANSWER land owner sues govt to buy his land
taxation - ANSWER govt right to tax real estate
ad valorem - ANSWER according to value
