Real Estate Paper 106

a.
The borrower mortgages the property, giving the lender a claim against the real estate. As the one who does the mortgaging, she is the mortgagor.

b.
3 points = 3%, or .03. The amount of the discount = x. The points = .03, and the amount of the loan is $35,000. So, x = (.03)(35,000); x = $1,050.

b.
Accrued means owed but not paid, therefore an account is paid after charges were made, such as real estate property taxes or credit cards.

b.
Square footage is calculated as length times width. (30 × 23 = 690)

d.
In making the public more aware of federal Fair Housing Laws, Congress requires all brokers to display the HUD Equal Housing Poster in their place of business.

b.
A management agreement is between the owner of income property and a management firm or individual property manager that outlines the scope of the manager’s authority.

a.
Equitable title is an interest in acquiring legal title. Legal title will not be obtained until the buyer has actually purchased the property.

d.
Buy-down is a financial arrangement whereby money is paid up-front to a lender in order to reduce the rate of interest for the borrower. A developer’s buydown is an agreement between the developer and the lender, not the borrower and the lender.

c.
The formula for the income approach is NOI divided by cap rate = value. $99,000 × 0.95 = $94,050 net income; $99,000 × 0.3 = $29,700 operating expense; $94,050 – $29,700 = $64,350 NOI; $64,350 ÷ 0.15 = $429,000.

b.
Condominium owners can borrow money by pledging their individual unit giving them the opportunity to structure the financing to suit their individual needs. Likewise, they can purchase their unit without any debt.