Real Estate Sales License Study Guide with complete
solution - Rhode Island
Deed of Trust Loan
Deed wherein legal title in real property is transferred to a trustee, which holds it as
security for a loan
Factors influencing real estate supply
- Labor force availability
- Construction and material costs
- Government controls
- Govt. financial policies
Factors influencing real estate demand
- Population
- Demographics
- Employment and wage levels
Realtor
Member of the National Association of Realtors
Schools are part of what real estate classification
Special purpose
Uses of Real Property
- Residential
- Commercial
- Mixed-Use
- Industrial
- Special Purpose
What is not a factor in how quickly the forces of supply and demand work
Pricing
Improvements do not include:
- Shrubbery
- Trees
- Lawns
Real property includes:
- Interests
- Benefits
- Rights that are automatically included in the ownership of land and real estate
Bundle of Legal Rights, as part of Real Property, include:
Right of:
- Possession
- Control
- Enjoyment
- Exclusion
- Disposition
Title is:
,- Right to ownership
- Bundle of legal rights
- Evidence of ownership provided by a deed
Appurtenance
Right or privilege associated with real property, e.g.
- parking space
- easement
- water rights
Emblements (personal property)
Annual plantings (not perennials) or crops or grains
Severance (personal property)
Can be separated from the land, e.g. apple being picked from the tree
Attachment or Annexation (personal property in to real property)
e.g. cement, stone, and sand mixed in to concrete to make a sidewalk
Fixture
Part of real property. Attached to the land or building
Legal tests for a fixture
- not easily removable (means of annexation)
- considered a permanent addition (adaptation to real estate)
- agreement of the parties (in the offer to purchase)
Trade fixtures
property attached to the structure but used in the course of business. Personal property
or Real Property.
Accession
Trade fixtures that are not removed and become part of the real property being
purchased
Economic characteristics of real estate
- Scarcity
- Improvements
- Permanence of investment
- Location
Physical characteristics of real estate
- Immobility
- Indestructibility
- Nonhomogeneity or uniqueness
Chattels
Personal property
Personalty
any tangible asset that can be moved (not fixed to land)
Types of Housing
- Single-family homes
- Apartment complexes
- Condominiums
- Cooperatives
- Planned Unit Developments (PUDs)
- Mixed-Use Developments (MUDs)
, - Modular homes
- Mobile homes
- Time shares
PITI
- Principal
- Interest
- Taxes
- Insurance
Loan programs with more flexible terms for those with lower credit ratings
- FHA (Federal Housing Administration)
- VA (Dept. of Veterans Affairs)
Investment considerations
- Appreciation
- Equity increase with an amortized loan
- Tax deductions
- Capital gains taxation exclusion (principal residence)
- Tax-free withdrawals from an IRA for downpayment
Co-insurance clause
Homeowner to maintain insurance equal to 80% of replacement costs
Comprehensive Loss Underwriting Exchange (CLUE)
Database of insurance claim history
National Flood Insurance Act of 1968
- Subsidizes flood insurance
- Administered by FEMA (Federal Emergency Management Agency)
Planned Unit Development (PUD)
master planned communities with single family homes
Does a homeowner's insurance policy typically cover theft?
Yes, but not for a person injured in the home
Lender's rule of thumb on % of income for PITI
28%
Tax exclusion on a primary residence
- $500,000 if filing jointly
- $250,000 for a single filer
Basic form of homeowner's policy covers:
theft, smoke damage, damage from fire, glass breakage, riot, vandalism
Not covered under the homeowner's basic policy
frozen pipes or flooding
A bill of sale is used to transfer:
Personal property
Agency
Fiduciary relationship in which the Agent is held in a position of special trust and
confidence by the principal
Principal
Client
Agent
Hired by Principal to act on their behalf
solution - Rhode Island
Deed of Trust Loan
Deed wherein legal title in real property is transferred to a trustee, which holds it as
security for a loan
Factors influencing real estate supply
- Labor force availability
- Construction and material costs
- Government controls
- Govt. financial policies
Factors influencing real estate demand
- Population
- Demographics
- Employment and wage levels
Realtor
Member of the National Association of Realtors
Schools are part of what real estate classification
Special purpose
Uses of Real Property
- Residential
- Commercial
- Mixed-Use
- Industrial
- Special Purpose
What is not a factor in how quickly the forces of supply and demand work
Pricing
Improvements do not include:
- Shrubbery
- Trees
- Lawns
Real property includes:
- Interests
- Benefits
- Rights that are automatically included in the ownership of land and real estate
Bundle of Legal Rights, as part of Real Property, include:
Right of:
- Possession
- Control
- Enjoyment
- Exclusion
- Disposition
Title is:
,- Right to ownership
- Bundle of legal rights
- Evidence of ownership provided by a deed
Appurtenance
Right or privilege associated with real property, e.g.
- parking space
- easement
- water rights
Emblements (personal property)
Annual plantings (not perennials) or crops or grains
Severance (personal property)
Can be separated from the land, e.g. apple being picked from the tree
Attachment or Annexation (personal property in to real property)
e.g. cement, stone, and sand mixed in to concrete to make a sidewalk
Fixture
Part of real property. Attached to the land or building
Legal tests for a fixture
- not easily removable (means of annexation)
- considered a permanent addition (adaptation to real estate)
- agreement of the parties (in the offer to purchase)
Trade fixtures
property attached to the structure but used in the course of business. Personal property
or Real Property.
Accession
Trade fixtures that are not removed and become part of the real property being
purchased
Economic characteristics of real estate
- Scarcity
- Improvements
- Permanence of investment
- Location
Physical characteristics of real estate
- Immobility
- Indestructibility
- Nonhomogeneity or uniqueness
Chattels
Personal property
Personalty
any tangible asset that can be moved (not fixed to land)
Types of Housing
- Single-family homes
- Apartment complexes
- Condominiums
- Cooperatives
- Planned Unit Developments (PUDs)
- Mixed-Use Developments (MUDs)
, - Modular homes
- Mobile homes
- Time shares
PITI
- Principal
- Interest
- Taxes
- Insurance
Loan programs with more flexible terms for those with lower credit ratings
- FHA (Federal Housing Administration)
- VA (Dept. of Veterans Affairs)
Investment considerations
- Appreciation
- Equity increase with an amortized loan
- Tax deductions
- Capital gains taxation exclusion (principal residence)
- Tax-free withdrawals from an IRA for downpayment
Co-insurance clause
Homeowner to maintain insurance equal to 80% of replacement costs
Comprehensive Loss Underwriting Exchange (CLUE)
Database of insurance claim history
National Flood Insurance Act of 1968
- Subsidizes flood insurance
- Administered by FEMA (Federal Emergency Management Agency)
Planned Unit Development (PUD)
master planned communities with single family homes
Does a homeowner's insurance policy typically cover theft?
Yes, but not for a person injured in the home
Lender's rule of thumb on % of income for PITI
28%
Tax exclusion on a primary residence
- $500,000 if filing jointly
- $250,000 for a single filer
Basic form of homeowner's policy covers:
theft, smoke damage, damage from fire, glass breakage, riot, vandalism
Not covered under the homeowner's basic policy
frozen pipes or flooding
A bill of sale is used to transfer:
Personal property
Agency
Fiduciary relationship in which the Agent is held in a position of special trust and
confidence by the principal
Principal
Client
Agent
Hired by Principal to act on their behalf
