Exam (elaborations)
Idaho Real Estate Mod 1 & 2 Questions Graded A+
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Idaho Real Estate Mod 1 & 2
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Idaho Real Estate Mod 1 & 2Appraisal - answer an estimate or opinion of value based on supportable evidence and
approval methods
CMA - Comparable Market Analysis - answer an analysis of probable value of real
estate done by individual other than an appraiser
BPO - Broker Price Opinion - answer an opinion of value of real estate value done by a
licensee with a broker level license. can charge
Elements of Value - answer1) demand with purchasing power
2) utility
3) scarcity
4) transferability
Market Value - answer estimate of value based on an analysis of data
Market Price - answer what the property actually sold for
Cost - answerthe price to build the structure including land cost
Regression - answerpulls down property value
Progression - answerraises property value
Over improvement - answerland improvement more extensive than surrounding
neighborhood
Principle of Substitution - answerthe value of a property cannot exceed the cost of
equivalent substitute properties
Principle of Highest and Best Use - answerthe most profitable singe use for a property
Plottage - answerincrease in value or utility by combining lots
Form Report - answermost common appraisal report
Narrative Report - answerlong, comprehensive appraisal report
,Three Approaches to Value - answer1) Market Data Approach aka Sales Comparison
Approach
2) Cost Approach
3) Income Approach
Sales Comparison Approach (Market Data Approach) - answervalue obtained by
comparing similarly sold properties
Cost Approach - answerused to obtain value on new structures or custom structures
such as museums, library, factory
Cost Approach - answerCost - depreciation + land cost
Sales Comparison Approach (Market Data Approach) - answerif comparable is superior
deduct from value, if inferior add to value
Physical Deterioration - answerdeferred maintenance (curable) peeling paint, bad roof,
bad floors, broken windows, termite damage..etc
Functional Obsolescence - answerout-dated design or feature (curable) low ceilings, 6
bd/1 bth, split entry, knob & tube wiring
External or Economic Obsolescence - answerconditions outside property lines; airport
flight path, next to free way, businesses close
Income Approach - answerbased on current value of the right to future income
Capitalization - answerdetermining the value of the property by interpreting the
property's net income with a percentage (NOI)
Gross Income Multiplier - answersales price / gross income =
Gross Rent Multiplier - answerratio based on current or projected rent
sales price/gross rent
First substantial business contact - answerwhen is Blue Brochure given?
Mortgagor - answerbuyer or borrower
Mortgagee - answerlender
Lien Theory State - answermortgagor (buyer) retains both legal and equitable title
Title Theory State - answerlegal title to the mortgagee (lender)
Elements of a real estate loan - answernote and security instrument
,Types of security instruments - answerDeed of Trust, Mortgage, Contract for Deed
Type of security instrument for 40 + acres agriculture - answermortgage
Type of security instrument for less than 80 acres non-agricutural - answerDeed of Trust
or Mortgage
Type of security instrument for 80+ acres any use - answerMortgage
Contracts for Deed ( Land Sales Contract) - answerowner carry
Note - answerthe borrowers personal promise to repay
Usury Laws - answerlegal limits on interest rates (Idaho is 12%)
Terms - answerlength of loan
Loan Origination Fees - answerfee computed off of loan amount
Discount Point - answerpre-paid interest equaling 1% of loan amount
Hypothecation - answerthe pledging of property as security on a loan
Defeasance Clause - answerrequires lender to release their interest when paid in full
Deed of Reconveyance - answera recorded document which gives notice a deed in trust
has been paid in full
Demand Features - answerAcceleration clause, due on sale clause, alienation clause
Subject to - answerseller remains liable for the loan
Assumption of - answerseller may be released of liability
Non-judicial foreclosure - answerforeclose on Deed of Trust
Notice of Default - answerfirst formal notice recorded regarding Deed of Trust
foreclosure
Notice of Trustee's Sale - answernotice of foreclosure on Deed of Trust; a) mailing
b)posting 3 attempts within 7 days c) publication once per week 4 times at least 30 days
before sale
Reinstatement Right - answerup to 115 days to make up all back charges to lender to
stop foreclosure on Deed of Trust
, 120th Day - answerday in which Deed of Trust foreclosure can go up for auction
No Redemption Right - answerDeed of Trust foreclosure does not allow borrower rights
to property after sale
Judicial Foreclosure - answerCourt required foreclosure on a mortgage
6 months redemption right - answerfor property 20 acres or less in judicial foreclosure
12 month redemption right - answerfor property 20 acres or more in judicial foreclosure
Sheriff's Deed - answerdeed given at end of redemption period to winner on judicial
foreclosure
Foreclosure for Land Sale Contract (Contract for Deed) (Owner Carry) - answerno rights
at foreclosure, mortgagee can re-enter and seize
Deed in Lieu - answerform of foreclosure known as a friendly foreclosure
Redemption - answerthe right of a mortgagor to buy back their property, can also be
used in tax sales
Reinstatement - answerpaying current only those payments delinquent plus foreclosure
costs
Deed to Purchaser at Trustees Sale - answertitle contains no warranties, transfer from
foreclosure sale
Deficiency Judgement - answerborrower may be order to repay any losses to bank
within 90 days
Vendor - answerseller in Land Sales Contract
Vendee - answerbuyer in Land Sales Contract
Short Sale - answersale of property for less than what is owed to the bank, bank has 5
years to seek deficiency judgement
TILA - Truth in Lending Act - answer1974 Federal Legislation to inform buyers of all
financing charges and true cost of borrowing
Regulation Z - answerdiscloses to buyer how much credit is actually costing them
3-day right of rescission - answerlimited right to cancel a credit transaction; does not
apply to purchases or non-owner occupied refi's
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