| |
| |
| Preface | |
| |
| |
| |
| Introduction to Real Estate | |
| |
| |
| How to Read This Book | |
| |
| |
| Transaction Overview | |
| |
| |
| Chapter Organization | |
| |
| |
| Career Opportunities | |
| |
| |
| License Requirements | |
| |
| |
| |
| Nature and Description of Real Estate | |
| |
| |
| Key Terms | |
| |
| |
| Land | |
| |
| |
| Improvements | |
| |
| |
| Fixtures | |
| |
| |
| Appurtenances | |
| |
| |
| Water Rights | |
| |
| |
| Land Descriptions | |
| |
| |
| Grid Systems | |
| |
| |
| Vertical Land Description | |
| |
| |
| Lot Types | |
| |
| |
| Physical Characteristics of Land | |
| |
| |
| Economic Characteristics of Land | |
| |
| |
| |
| Rights and Interests in Land | |
| |
| |
| Key Terms | |
| |
| |
| Feudal and Allodial Systems | |
| |
| |
| Government Rights in Land | |
| |
| |
| Protecting Ownership | |
| |
| |
| Fee Simple | |
| |
| |
| Encumbrances | |
| |
| |
| Qualified Fee Estates | |
| |
| |
| Life Estates | |
| |
| |
| Statutory Estates | |
| |
| |
| Freehold Estates | |
| |
| |
| Leasehold Estates | |
| |
| |
| Overview | |
| |
| |
| Pictorial Summary | |
| |
| |
| |
| Forms of Ownership | |
| |
| |
| Key Terms | |
| |
| |
| Sole Ownership | |
| |
| |
| Tenants in Common | |
| |
| |
| Joint Tenancy | |
| |
| |
| Tenancy by the Entirety | |
| |
| |
| Community Property | |
| |
| |
| Partnership | |
| |
| |
| Corporations | |
| |
| |
| Trusts | |
| |
| |
| Limited Liability Companies | |
| |
| |
| Syndication | |
| |
| |
| Caution | |
| |
| |
| |
| Transferring Title | |
| |
| |
| Key Terms | |
| |
| |
| Deeds | |
| |
| |
| Conveyance After Death | |
| |
| |
| Adverse Possession | |
| |
| |
| Easement by Prescription | |
| |
| |
| Ownership by Accession | |
| |
| |
| Public Grant | |
| |
| |
| Dedication | |
| |
| |
| Forfeiture | |
| |
| |
| Alienation | |
| |
| |
| |
| Recordation, Abstracts, and Title Insurance | |
| |
| |
| Key Terms | |
| |
| |
| Need for Public Records | |
| |
| |
| Requirements for Recording | |
| |
| |
| Public Records Organization | |
| |
| |
| Chain of Title | |
| |
| |
| Abstract of Title | |
| |
| |
| Title Insurance | |
| |
| |
| The Torrens System | |
| |
| |
| Marketable Title Acts | |
| |
| |
| |
| Contract Law | |
| |
| |
| Key Terms | |
| |
| |
| How a Contract Is Created | |
| |
| |
| Essentials of a Valid Contract | |
| |
| |
| Performance and Discharge of Contracts | |
| |
| |
| Breach of Contract | |
| |
| |
| Statute of Limitations | |
| |
| |
| Implied Obligations | |
| |
| |
| |
| Real Estate Sales Contracts | |
| |
| |
| Key Terms | |
| |
| |
| Purpose of Sales Contracts | |
| |
| |
| Purchase Contracts | |
| |
| |
| The Binder | |
| |
| |
| Letter of Intent | |
| |
| |
| Practicing Law | |
| |
| |
| Installment Contracts | |
| |
| |
| Equitable Title | |
| |
| |
| Option Contracts | |
| |
| |
| Lease with Option to Buy | |
| |
| |
| Right of First Refusal | |
| |
| |
| Exchange Agreements | |
| |
| |
| Typical Trade Contract | |
| |
| |
| |
| Mortgage and Note | |
| |
| |
| Key Terms | |
| |
| |
| Promissory Note | |
| |
| |
| The Mortgage Instrument | |
| |
| |
| Mortgage Satisfaction | |
| |
| |
| "Subject To" | |
| |
| |
| Assumption | |
| |
| |
| Novation | |
| |
| |
| Estoppel | |
| |
| |
| Debt Priorities | |
| |
| |
| The Foreclosure Process | |
| |
| |
| Judicial Foreclosure | |
| |
| |
| Strict Foreclosure | |
| |
| |
| Power of Sale | |
| |
| |
| Entry and Possession | |
| |
| |
| Deed in Lieu of Foreclosure | |
| |
| |
| Installment Contract Foreclosure | |
| |
| |
| Deed of Trust | |
| |
| |
| Equitable Mortgage | |
| |
| |
| Deed as Security | |
| |
| |
| Choice of Security Instrument | |
| |
| |
| |
| Deed of Trust | |
| |
| |
| Key Terms | |
| |
| |
| Parties to a Deed of Trust | |
| |
| |
| Reconveyance | |
| |
| |
| Deed of Trust Document | |
| |
| |
| Jurisdictions Using Deeds of Trust | |
| |
| |
| Advantages of the Deed of Trust | |
| |
| |
| |
| Lending Practices | |
| |
| |
| Key Terms | |
| |
| |
| Term Loans | |
| |
| |
| Amortized Loans | |
| |
| |
| Budget Mortgage | |
| |
| |
| Balloon Loan | |
| |
| |
| Partially Amortized Loan | |
| |
| |
| Earlier Payoff | |
| |
| |
| Loan-to-Value Ratio | |
| |
| |
| Equity | |
| |
| |
| Loan Points | |
| |
| |
| FHA Insurance Programs | |
| |
| |
| Department of Veterans Affairs | |
| |
| |
| Private Mortgage Insurance | |
| |
| |
| Rural Housing Services Administration | |
| |
| |
| |
| The Loan and the Consumer | |
| |
| |
| Key Terms | |
| |
| |
| Truth-in-Lending Act | |
| |
| |
| Loan Application and Approval | |
| |
| |
| |
| Sources of Financing | |
| |
| |
| Key Terms | |
| |
| |
| Primary Market | |
| |
| |
| Savings and Loan Associations | |
| |
| |
| Commercial Banks | |
| |
| |
| Life Insurance Companies | |
| |
| |
| Mortgage Companies | |
| |
| |
| Mortgage Brokers | |
| |
| |
| Computerized Loan Origination | |
| |
| |
| Municipal Bonds | |
| |
| |
| Other Lenders | |
| |
| |
| Secondary Market | |
| |
| |
| Automated Underwriting Systems | |
| |
| |
| Availability and Price of Mortgage Money | |
| |
| |
| Usury | |
| |
| |
| Price to the Borrower | |
| |
| |
| Due-On-Sale | |
| |
| |
| Prepayment | |
| |
| |
| |
| Types of Financing | |
| |
| |
| Key Terms | |
| |
| |
| Adjustable Rate Mortgages | |
| |
| |
| Graduated Payment Mortgage | |
| |
| |
| Equity Sharing | |
| |
| |
| "Rich Uncle" Financing | |
| |
| |
| Package Mortgage | |
| |
| |
| Blanket Mortgage | |
| |
| |
| Reverse Mortgage | |
| |
| |
| Construction Loan | |
| |
| |
| Blended-Rate Loan | |
| |
| |
| Equity Mortgage | |
| |
| |
| Affordable Housing Loans | |
| |
| |
| Asset Integrated Mortgage (AIM) | |
| |
| |
| Seller Financing | |
| |
| |
| Wraparound Mortgage | |
| |
| |
| Subordination | |
| |
| |
| Contract for Deed | |
| |
| |
| Option | |
| |
| |
| Overly Creative Financing? | |
| |
| |
| Investing in Mortgages | |
| |
| |
| Rental | |
| |
| |
| Land Leases | |
| |
| |
| Financing Overview | |
| |
| |
| |
| Taxes and Assessments | |
| |
| |
| Key Terms | |
| |
| |
| Property Taxes | |
| |
| |
| Unpaid Property Taxes | |
| |
| |
| Assessment Appeal | |
| |
| |
| Property Tax Exemptions | |
| |
| |
| Property Tax Variations | |
| |
| |
| Special Assessments | |
| |
| |
| Income Taxes on the Sale of One's Residence | |
| |
| |
| Capital Gains | |
| |
| |
| Installment Method | |
| |
| |
| Property Tax and Interest Deductions | |
| |
| |
| Interest Deduction Limitations | |
| |
| |
| Impact on Real Estate | |
| |
| |
| Agent's Liability for Tax Advice | |
| |
| |
| Conveyance Taxes | |
| |
| |
| |
| Title Closing and Escrow | |
| |
| |
| Key Terms | |
| |
| |
| Buyer's Walk-Through | |
| |
| |
| Title Closing | |
| |
| |
| Closing or Settlement Meeting | |
| |
| |
| Escrow | |
| |
| |
| Delays and Failure to Close | |
| |
| |
| Loan Escrows | |
| |
| |
| Reporting Requirements | |
| |
| |
| Prorating at the Closing | |
| |
| |
| Sample Closing | |
| |
| |
| Settlement Statement | |
| |
| |
| Real Estate Settlement Procedures Act | |
| |
| |
| |
| Real Estate Leases | |
| |
| |
| Key Terms | |
| |
| |
| The Leasehold Estate | |
| |
| |
| Creating a Valid Lease | |
| |
| |
| The Lease Document | |
| |
| |
| Landlord-Tenant Laws | |
| |
| |
| Setting Rents | |
| |
| |
| Option Clauses | |
| |
| |
| Assignment and Subletting | |
| |
| |
| Ground Lease | |
| |
| |
| Vertical Lease | |
| |
| |
| Contract Rent, Economic Rent | |
| |
| |
| Lease Termination | |
| |
| |
| Rent Control | |
| |
| |
| Property Management | |
| |
| |
| Tenant Selection | |
| |
| |
| Security Deposit | |
| |
| |
| Tenant Retention | |
| |
| |
| Collecting Rents | |
| |
| |
| On-Site Management | |
| |
| |
| Off-Site Management | |
| |
| |
| Job Opportunities | |
| |
| |
| |
| Real Estate Appraisal | |
| |
| |
| Key Terms | |
| |
| |
| Purpose and Use of Appraisals | |
| |
| |
| The Real Property Valuation Process | |
| |
| |
| Value Approaches | |
| |
| |
| Market Value Defined | |
| |
| |
| Market Comparison Approach | |
| |
| |
| Cost Approach | |
| |
| |
| Income Approach | |
| |
| |
| Choice of Approaches | |
| |
| |
| Reconciliation | |
| |
| |
| Appraiser's Best Estimate | |
| |
| |
| Appraisal Regulation | |
| |
| |
| Formats of Appraisal Reports | |
| |
| |
| Characteristics of Value | |
| |
| |
| Principles of Value | |
| |
| |
| Multiple Meanings of the Word Value | |
| |
| |
| Buyer's and Seller's Markets | |
| |
| |
| Professional Appraisal Societies | |
| |
| |
| |
| Licensing Laws and Professional Affiliation | |
| |
| |
| Key Terms | |
| |
| |
| Rationale for Licensing | |
| |
| |
| Persons Required to Be Licensed | |
| |
| |
| Broker | |
| |
| |
| Salesperson | |
| |
| |
| Sales Associate | |
| |
| |
| Qualifications for Licensing | |
| |
| |
| Licensing Procedure | |
| |
| |
| Examination Services | |
| |
| |
| Nonresident Licensing | |
| |
| |
| Licensing the Business Firm | |
| |
| |
| Real Estate Regulation | |
| |
| |
| License Suspension and Revocation | |
| |
| |
| Bonds and Recovery Funds | |
| |
| |
| Securities License | |
| |
| |
| Affiliating with a Broker | |
| |
| |
| Independent Contractor Status | |
| |
| |
| Franchised Offices | |
| |
| |
| Professional Real Estate Associations | |
| |
| |
| REALTOR | |
| |
| |
| Code of Ethics | |
| |
| |
| |
| The Principal-Broker Relationship: Employment | |
| |
| |
| Key Terms | |
| |
| |
| Listing Agreement | |
| |
| |
| Exclusive Right to Sell Listing | |
| |
| |
| Exclusive Agency Listing | |
| |
| |
| Open Listing | |
| |
| |
| Net Listing | |
| |
| |
| Advance Fee Listing | |
| |
| |
| Exclusive Authority to Purchase | |
| |
| |
| Multiple Listing Service | |
| |
| |
| Broker Compensation | |
| |
| |
| Procuring Cause | |
| |
| |
| Terminating the Employment Contract | |
| |
| |
| Bargain Brokers | |
| |
| |
| Perceived Value | |
| |
| |
| |
| The Principal-Broker Relationship: Agency | |
| |
| |
| Key Terms | |
| |
| |
| Agency | |
| |
| |
| Broker's Obligations to the Principal | |
| |
| |
| Broker's Obligations to Third Parties | |
| |
| |
| Buyer Agency | |
| |
| |
| Principal's Obligations | |
| |
| |
| Broker's Sales Staff | |
| |
| |
| Cooperating Broker | |
| |
| |
| Agency Disclosure | |
| |
| |
| Owner Disclosure Statement | |
| |
| |
| Interstate Land Sales Disclosure Statements | |
| |
| |
| Antitrust Laws | |
| |
| |
| Errors and Omission Insurance | |
| |
| |
| |
| Fair Housing, ADA, Equal Credit, and Community Reinvestment | |
| |
| |
| Key Terms | |
| |
| |
| Fair Housing | |
| |
| |
| The Americans with Disabilities Act | |
| |
| |
| Equal Credit Opportunity Act | |
| |
| |
| Community Reinvestment Act | |
| |
| |
| |
| Condominiums, Cooperatives, PUDs, and Timeshares | |
| |
| |
| Key Terms | |
| |
| |
| The Desire for Land-Use Efficiency | |
| |
| |
| Condominium | |
| |
| |
| Condominium Management | |
| |
| |
| Maintenance Fees | |
| |
| |
| Property Taxes and Insurance | |
| |
| |
| Condominium Financing | |
| |
| |
| Advantages of Condominium Living | |
| |
| |
| Disadvantages of Condominium Living | |
| |
| |
| Before Buying | |
| |
| |
| Cooperative Apartments | |
| |
| |
| Planned Unit Development | |
| |
| |
| Resort Timesharing | |
| |
| |
| |
| Property Insurance | |
| |
| |
| Key Terms | |
| |
| |
| Property Damage | |
| |
| |
| Public Liability | |
| |
| |
| Homeowner Policies | |
| |
| |
| New for Old | |
| |
| |
| Lender Requirements | |
| |
| |
| Flood Insurance | |
| |
| |
| Landlord Policies | |
| |
| |
| Policy Cancellation | |
| |
| |
| Policy Takeovers | |
| |
| |
| Home Buyer's Insurance | |
| |
| |
| |
| Land-Use Control | |
| |
| |
| Key Terms | |
| |
| |
| Zoning | |
| |
| |
| Subdivision Regulations | |
| |
| |
| Building Codes | |
| |
| |
| Deed Restrictions | |
| |
| |
| Planning Ahead for Development | |
| |
| |
| Environmental Impact Statements | |
| |
| |
| Precautions | |
| |
| |
| Windfalls and Wipe-outs | |
| |
| |
| Transferable Development Rights | |
| |
| |
| |
| Real Estate and the Economy | |
| |
| |
| Key Terms | |
| |
| |
| Economic Base | |
| |
| |
| Short-run Demand for Housing | |
| |
| |
| Long-run Demand for Housing | |
| |
| |
| Age Distribution | |
| |
| |
| Governmental Impact | |
| |
| |
| Fiscal Policy | |
| |
| |
| Monetary Policy | |
| |
| |
| Secondary Mortgage Market | |
| |
| |
| Types of Inflation | |
| |
| |
| 1975-2000 Period | |
| |
| |
| Watching the Fed | |
| |
| |
| The Outlook | |
| |
| |
| |
| Investing in Real Estate | |
| |
| |
| Key Terms | |
| |
| |
| Benefits of Real Estate Investing | |
| |
| |
| Depreciation Calculation | |
| |
| |
| Capital Gains | |
| |
| |
| At-Risk Rules | |
| |
| |
| Installment Sales | |
| |
| |
| Construction-Period Expenses | |
| |
| |
| Rehabilitation Tax Credits | |
| |
| |
| Low-Income Housing Credit | |
| |
| |
| Watch List | |
| |
| |
| Equity Build-up | |
| |
| |
| Leverage | |
| |
| |
| Property Selection | |
| |
| |
| Investment Timing | |
| |
| |
| "GLITAMAD" | |
| |
| |
| Developing a Personal Investment Strategy | |
| |
| |
| Valuing an Investment | |
| |
| |
| Limited Partnerships | |
| |
| |
| Disclosure Laws | |
| |
| |
| Effort and Courage | |
| |
| |
| |
| Construction Illustrations and Terminology | |
| |
| |
| |
| Real Estate Math Review | |
| |
| |
| |
| Interest and Present Value Tables | |
| |
| |
| |
| Measurement Conversion Table | |
| |
| |
| |
| Answers to Chapter Questions and Problems | |
| |
| |
| Index and Glossary | |