ACEABLE AGENT - PRINCIPLES OF
REAL ESTATE II EXAM NOTES
h Formulas to calculate commission? - TOTAL = PART/PERCENTAGE
PART = TOTAL x PERCENTAGE
PERCENTAGE = PART/ TOTAL
What is the term that describes the money that is lent? - PRINCIPAL
Down payment minus earnest money? - CASH TO CLOSE
Loan payment + loan principal? - TOTAL SALES PRICE
Loan points/fees charged 1% to compensate loan officers for underwriting and administering the loan. -
ORIGINATION POINTS
Loan points/fees charged 1% in exchange for a lower interest rate on the loan. - DISCOUNT POINTS
When is the seller responsible for property taxes? - DAY OF CLOSING
Ethical code for appraisers? - Uniform Standards of Professional Appraisal Practice (USPAP)
Who regulates USPAP? - Appraiser Qualifications Board (AQB)
Texas Appraiser Licensing & Certification Board acronym? - TALCB
Qualified to appraise:
-1 to 4 family non-complex residential units, <1 mill
-1 to 4 family residential complex unit, <$250k
-75 add'l education hours
-2000 hours experience over min 1 year
-Assoc Degree or 30 course credit hours - LICENSED RESIDENTIAL APPRAISER
Qualified to appraise:
-1 to 4 residential unit, any value okay
-125 add'l education hours
-2,500 hours experience over min 2 years
-Bach Degree or higher - CERTIFIED RESIDENTIAL APPRAISER
,Qualified to appraise:
-any type of property
-225 add'l education hours
-Bach Degree
-3000 hours experience over min 2.5 years
-1/2 experience must be non residential - CERTIFIED GENERAL APPRAISER
The value of something is affected by the cost of getting a similar item elsewhere. Similar properties
should have fairly similar values. - PRINCIPLE OF SUBSTITUTION
Values are highest when the houses in a neighborhood look roughly the same. - PRINCIPLE OF
CONFORMITY
A property's overall value is made up of the combined value of each of its parts. The value added by the
improvement could be higher or lower than the expense. - PRINCIPLE OF CONTRIBUTION
The condition of a property, the desirability of its location, and the market in which it exists can always
change. Appraisals are only good for one month. - PRINCIPLE OF CHANGE
1. state obj
2. list data
3. gather/record data
4. determine highest and best use
5. land value
6. estimate value using applicable approaches
7. final value estimate
8. complete and present report - STEPS TO COMPLETE AN APPRAISEL
What is a "No-reserve" auction? An auction which a minimum acceptable sales price (reserve) is set. -
MINIMUM BID AUCTION
What are 3 ways to calculate value? - 1. SALES COMPARISON APPROACH
2. THE COST APPROACH
3. THE INCOME APPROACH
Approach to calculate value based on improvements, loss, comparable, by a) quantity survey method, b)
unit in place method, c) square foot method.
, Property value = Cost of Reproduction - Depreciated Value + Land Value - COST APPROACH
Approach to calculate value for commercial properties?
NOI/ Cap Rate = Value
or "IRV" - INCOME APPROACH
What are 3 principles to consider when evaluating property and neighborhood? - 1. PRINCIPLE OF
CONFORMITY
2. PRINCIPLE OF REGRESSION
3. PRINCIPLE OF PROGRESSION
What is the term used to describe when the property owner has the right to sue the government for
taking their land? - INVERSE CONDEMNATION
What is the acronym for the Federal Home Loan Mortgage Corp that deals with small thrift banks
created in 1970? - FREDDIE MAC
What is the acronym for Federal Agriculture Mortgage Corp that provides secondary market for
agricultural real estate mortgage loans, rural housing loans, and rural utility coop loans? - FARMER MAC
A commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct
identities.
-the sponsor is like a general manager
-the authority of partners is limited
-temporary business opposed to ongoing - JOINT VENTURE
What is the system that was created in 1932:
1. regulate thrift institutions, mutual/stock companies
2. set and reserve requirements
3. establish discount rates
4. provide insurance for depositors
5. operates 11 district banks - Federal Home Loan Bank System (FHLB)
What type of company?
REAL ESTATE II EXAM NOTES
h Formulas to calculate commission? - TOTAL = PART/PERCENTAGE
PART = TOTAL x PERCENTAGE
PERCENTAGE = PART/ TOTAL
What is the term that describes the money that is lent? - PRINCIPAL
Down payment minus earnest money? - CASH TO CLOSE
Loan payment + loan principal? - TOTAL SALES PRICE
Loan points/fees charged 1% to compensate loan officers for underwriting and administering the loan. -
ORIGINATION POINTS
Loan points/fees charged 1% in exchange for a lower interest rate on the loan. - DISCOUNT POINTS
When is the seller responsible for property taxes? - DAY OF CLOSING
Ethical code for appraisers? - Uniform Standards of Professional Appraisal Practice (USPAP)
Who regulates USPAP? - Appraiser Qualifications Board (AQB)
Texas Appraiser Licensing & Certification Board acronym? - TALCB
Qualified to appraise:
-1 to 4 family non-complex residential units, <1 mill
-1 to 4 family residential complex unit, <$250k
-75 add'l education hours
-2000 hours experience over min 1 year
-Assoc Degree or 30 course credit hours - LICENSED RESIDENTIAL APPRAISER
Qualified to appraise:
-1 to 4 residential unit, any value okay
-125 add'l education hours
-2,500 hours experience over min 2 years
-Bach Degree or higher - CERTIFIED RESIDENTIAL APPRAISER
,Qualified to appraise:
-any type of property
-225 add'l education hours
-Bach Degree
-3000 hours experience over min 2.5 years
-1/2 experience must be non residential - CERTIFIED GENERAL APPRAISER
The value of something is affected by the cost of getting a similar item elsewhere. Similar properties
should have fairly similar values. - PRINCIPLE OF SUBSTITUTION
Values are highest when the houses in a neighborhood look roughly the same. - PRINCIPLE OF
CONFORMITY
A property's overall value is made up of the combined value of each of its parts. The value added by the
improvement could be higher or lower than the expense. - PRINCIPLE OF CONTRIBUTION
The condition of a property, the desirability of its location, and the market in which it exists can always
change. Appraisals are only good for one month. - PRINCIPLE OF CHANGE
1. state obj
2. list data
3. gather/record data
4. determine highest and best use
5. land value
6. estimate value using applicable approaches
7. final value estimate
8. complete and present report - STEPS TO COMPLETE AN APPRAISEL
What is a "No-reserve" auction? An auction which a minimum acceptable sales price (reserve) is set. -
MINIMUM BID AUCTION
What are 3 ways to calculate value? - 1. SALES COMPARISON APPROACH
2. THE COST APPROACH
3. THE INCOME APPROACH
Approach to calculate value based on improvements, loss, comparable, by a) quantity survey method, b)
unit in place method, c) square foot method.
, Property value = Cost of Reproduction - Depreciated Value + Land Value - COST APPROACH
Approach to calculate value for commercial properties?
NOI/ Cap Rate = Value
or "IRV" - INCOME APPROACH
What are 3 principles to consider when evaluating property and neighborhood? - 1. PRINCIPLE OF
CONFORMITY
2. PRINCIPLE OF REGRESSION
3. PRINCIPLE OF PROGRESSION
What is the term used to describe when the property owner has the right to sue the government for
taking their land? - INVERSE CONDEMNATION
What is the acronym for the Federal Home Loan Mortgage Corp that deals with small thrift banks
created in 1970? - FREDDIE MAC
What is the acronym for Federal Agriculture Mortgage Corp that provides secondary market for
agricultural real estate mortgage loans, rural housing loans, and rural utility coop loans? - FARMER MAC
A commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct
identities.
-the sponsor is like a general manager
-the authority of partners is limited
-temporary business opposed to ongoing - JOINT VENTURE
What is the system that was created in 1932:
1. regulate thrift institutions, mutual/stock companies
2. set and reserve requirements
3. establish discount rates
4. provide insurance for depositors
5. operates 11 district banks - Federal Home Loan Bank System (FHLB)
What type of company?
