Principles of Real Estate 1 Flashcards Preview

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Flashcards in Principles of Real Estate 1 Deck (20)
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1
Q

appraisal

A
  • An appraiser’s opinion of value.

- Lenders use to determine the market value of the property bing being used to secure the loan.

2
Q

loan to value ratio (LTV)

A
  • Percentage of value or sales price that a lender is willing to finance
  • Lenders use appraisal to make sure loan amount doesn’t exceed loan-to-value ratio.
3
Q

highest and best use (of a property)

A

the legal use that gives the greatest return in money and/or amenities

4
Q

principle of contribution

A

suggests that the value of a property is equal to the sum of the contributory value of each of its component parts.

5
Q

principle of change

A
  • the forces acting on a parcel of land are always affecting the value of the land.
  • this makes appraisals temporary
  • change can be specific or external to the property
6
Q

principle of anticipation

A

the purchase price is affected by the expectation of future appeal and benefits.

7
Q

principle of substitution

A

the value of a commodity is influenced by the cost of acquiring a substitute or comparable item

8
Q

principle of conformity

A

suggests that value is maximized when there is a reasonable degree of homogeneity, or sameness, in a neighborhood .

9
Q

functional obsolescence

A

loss in desirability of style, layout, or function of an element of a property over time

10
Q

principle of regression

A

the presence of lower-priced properties in the area will cause a decline in the value of the subject property.

11
Q

principle of of competition

A
  • the absence of com-petition will cause prices to increase in the marketplace.
  • conversely, increase competition tends to bring prices down
12
Q

principle of of competition

A
  • the absence of com-petition will cause prices to increase in the marketplace.
  • conversely, increase competition tends to bring prices down
13
Q

external obsolescence

A

loss in value of a property caused by factors outside of the property itself

14
Q

Primary Mortgage Market

A

Market in which borrowers and mortgage lenders come together to create and negotiate terms of a mortgage transaction

15
Q

Secondary mortgage market

A
  • Exists for the purchase and sale of existing mortgages to investors.
  • market wherein loan originators can sell their loans and recover cash for originating more loans
16
Q

Closing

A

The consummation of a real estate transaction in which all appropriate documents are signed and the proceeds of the mortgage loan are disbursed by the lender

17
Q

Funding

A

Process of transferring funds to a title or escrow company for disbursement

18
Q

Servicing

A

Includes sending monthly payment statements and collecting monthly payments, maintaining records of payments and balances, collecting and paying taxes and insurance, remitting funds to the note holder, and following up on delinquencies

19
Q

RMLO

A
  • Residential Mortgage Loan Originator
  • trusted loan originators
  • loan officer
  • mortgage banker/broker
  • term mandated by the SAFE Act
20
Q

Redlining

A

Refusing to provide financing in a particular area because of location