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Real Estate Test > Glossary Terms > Flashcards

Glossary Terms Flashcards

1
Q

Abandonment

A

giving up the right to possess a property, building, or real estate area through non-use and intention

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2
Q

Abutting

A

sitting next to another properly

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3
Q

acceleration clause

A

an addendum that forces the borrower to repay the entire loan upon the lenders insistence for specific reasons listed in the clause

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4
Q

accretion

A

increase of the amount of land by natural deposits of soil onto the property

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5
Q

accrued depreciation

A

the total loss of value on a property

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6
Q

accrued items

A

the additional costs still outstanding at the close of the real estate deal, such as interest, insurance, HOA fees

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7
Q

acre

A

equal to 4840 square yards ro 43560 square feet

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8
Q

actual notice

A

specific information given to a party, such as tenant, landlord, buyer or seller

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9
Q

addendum

A

a clue that provides more specific information to clarify a contract

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10
Q

adjacent

A

property or buildings next to each other but might not tough each other

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11
Q

adjoining

A

property or building next to each other that touch each other

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12
Q

adjustable rate mortgage

A

a loan rate that changes throughout the period of the load. sometimes called a variable rate or flexible rate

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13
Q

adjusted basis

A

the final cost of a property after improvements are added and deductions or reduced value are subtracted

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14
Q

adjustment date

A

the date agreed upon by the buyer and seller for financial changes

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15
Q

administrator

A

the court appointed person who executes a person’s estate if there is not a will

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16
Q

ad valorem tax

A

property tax on the current value of the land

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17
Q

adverse possession

A

the ways by which a person may acquire property, such as through purchase, inheritance, or other methods, including without payment as in squatting

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18
Q

agreement of sale

A

a contract between two parties to buy/sell property, usually over time

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19
Q

alienation

A

placement of ownership of property from one person/company to another person/company

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20
Q

alienation clause

A

an addendum to the mortgage contract that keeps the borrower from reselling the property without paying the lender

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21
Q

allodial system

A

a national system overseen by law that monitors property ownership

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22
Q

amenities

A

‘extras’ on a property that make it worth more or more attractive to buyers. location or kitchen upgrades are two examples.

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23
Q

amortization

A

paying off the principle and interest on a debt with equal payments until the debt is repaid

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24
Q

amortize

A

pay off the principle and interest on a loan

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25
Q

annual percentage rate

A

the percentage above the principle added to the loan over 12 months. it includes additional costs, such as closing costs and fees and not just interest rates

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26
Q

anti-deficiency law

A

a statute that stops the lender from pursuing the buyer for a loss on a property after a foreclosure sale

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27
Q

anti-trust laws

A

national laws that encourage free market trade and practices and prohibit the restriction of such

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28
Q

apportionments

A

the division of costs, such as fees and HOA responsibilities, between the seller and the purchaser

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29
Q

appraisal

A

assessing the worth of land or property by a professional, qualified person who is usually licensed

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30
Q

appreciation

A

growth in the worth of real estate

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31
Q

appurtenance

A

an attachement to land or edifices that now conveys with property

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32
Q

arbitration

A

dispute resolution through the use of a third party

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33
Q

assessed value

A

the tax-related value put on a property

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34
Q

assessment

A

the placement of tax-related value on a property

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35
Q

assessor

A

a professional who determines the tax-related value of a property

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36
Q

assumption

A

the process of the buyer taking over the seller’s mortgage

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37
Q

avulsion

A

transfer of land because water, such as a stream or brook, changes course

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38
Q

balloon mortgage

A

a mortgage with a small payments due for a specified period, such as three to give years, with a lump sum or a balloon due at the end of the mortgage

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39
Q

bequest

A

transfer of personal property through a will

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40
Q

betterment

A

upgrade to property

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41
Q

bilateral contract

A

a contract, such as a rental agreement, when both parties agree to comply with or not comply with certain terms

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42
Q

bill of sale

A

a legal paper that transfers ownership of property from one person (company) to another

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43
Q

binder

A

money paid to hold a property for set terms

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44
Q

blanket mortgage

A

a mortgage owned by the same person on at least two properties

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45
Q

bond

A

a type of insurance money that protects a professional against loss

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46
Q

cap

A

the maximum increase in interest for a mortgage with changing rates

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47
Q

capital expenditure

A

money spent to improve the value of real estate

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48
Q

capitalization

A

the total yearly potential earnings on a property, such as a rental

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49
Q

capitalization rate

A

a percentage that can be used to compare investment opportunities. this is determined by dividing the yearly capitalization by the cost of the property.

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50
Q

caveat emptor

A

buyer beware

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51
Q

certificate of title

A

an official decision on the ownership, status or availability of a piece of real estate through public documents

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52
Q

chattel

A

any property someone owns except real estate (i.e. personal property)

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53
Q

Codicil

A

an addendum to a will that explains additions or deletions to the document

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54
Q

commitment letter

A

a document from the mortgage company that informs the borrower regarding loan approval and the terms of said loan

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55
Q

community property

A

real estate and chattel shared by 2 parties, usually husband and wife

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56
Q

comparative market analysis

A

assessing the worth of real estate through the value of similar pirces of real estate in the area. Only properties that have been sold are used.

57
Q

competitive market analysis

A

a list of benefits of the property and a comparison to other homes in the area. properties that have been recently sold and listed are used.

58
Q

constructive eviction

A

when a tenant moved out of a residence because of the poor quality of the residence without being liable for the rent

59
Q

contingency

A

certain requirements that must be met to fulfill the contract, such as the sale of the buyer’s home so they can afford the new residence

60
Q

convertible ARM

A

an agreement that the buyer can change an adjustable rate mortgage to a fixed rate. there is a cost associated with this

61
Q

conveyance

A

the legal transfer of property from one party to another

62
Q

cost approach

A

a way to assess real estate value by starting with the worth of the property, subtracting cost and adding improvements

63
Q

covenant

A

specifications in the deed requiring obligations or restrictions on real estate use

64
Q

defeasance clause

A

the legal option that the lender has to repossess delinquent payments or the property from the borrower in case of default

65
Q

deficiency judgement

A

a legal document ordering the collection of the difference between what a borrower owes to the bank and the sale price of a home

66
Q

devise

A

a gift of real estate to an heir through a will

67
Q

devisee

A

the person who receives a gift of property from a will

68
Q

dispossess

A

legal process of eviction

69
Q

earnest money

A

money to prove the buyer’s serious intent of purchasing the home

70
Q

easement by necessity

A

the need to walk on someone else’s property by necessity

71
Q

easement by prescription

A

accepted use of property by another person that is unnecessary. this becomes legal when it occurs over a certain number of years, such as a short cut through a neighbors yard

72
Q

easement in gross

A

accepted use of property that remains with the individual and does not convey with the property.

73
Q

effective age

A

the age of a building based on the condition of the building

74
Q

encumbrance

A

assessments against a property, such as delinquent HOA fees, any mortgages or easements that impact the value

75
Q

equitable title

A

the right someone has to a property when they commit to buy it although he deal is not yet finalized

76
Q

executory contract

A

a legal agreement that is awaiting action by at least one party for completion

77
Q

fee simple

A

full and complete ownership of real estate

78
Q

freehold estate

A

continued ownership or stake in a property as compared to a temporary stake or a lease

79
Q

functional obsolescence

A

the decrease in worth on the real estate except those caused by wear and tear

80
Q

general warranty deed

A

a guarantee that the title is free and clear of other claims against it for the protection of the buyer

81
Q

gross income multiplier

A

a way to assess the profitability of property arrived at by dividing the total price paid by the monthly rental rate

82
Q

gross rent multiplier

A

a way to assess the profitability of property arrived at by dividing the total price paid by the monthly rental rate

83
Q

highest and best use

A

the most productive use of real estate that will provide the greatest financial return over a specified period of time

84
Q

income capitalization approach

A

a specific formula used to assess the income-producing worth of a property

85
Q

indemnify

A

to insure against loss

86
Q

interim financing

A

a transitional loan to bridge the time frame until the buyer can obtain permeant financing, example a construction loan

87
Q

intestate

A

without legal will or without any will at all

88
Q

joint tenancy

A

more than one individual who owns property in common, usually related

89
Q

landlocked

A

property that is not accessible to public roads except through neighboring property

90
Q

lease option

A

the renter can decide to buy the property under certain conditions

91
Q

littoral rights

A

the shore land next to an ocean or very large body of water that the property owner has rights to

92
Q

lock-in

A

the borrower pays a fee to guarantee a certain interest rate for a specific time period, especially if the borrower thinks the interest rate will rise

93
Q

market date approach

A

a comparison of recent property sales to asses real estate worth

94
Q

market value

A

in real estate, price range between the maximum purchase price and the minimum purchase price

95
Q

mechanic’s lein

A

a hold on the construction and on the real estate that guarantees payment for the work done on the property

96
Q

marketable title

A

free and clear title

97
Q

mutual rescission

A

an agreement to void a contract by all involved parties

98
Q

net income

A

when all the bills have been paid, the earnings that remain

99
Q

net listing

A

any funds above the original price of the property that are paid to the real estate agent - illegal in Massachusetts

100
Q

obsolescence

A

a decrease in worth because of out-dated design or construction such as a home without a dishwasher or cable hook-up

101
Q

open listing

A

an agreement that allows a buyer to purchase a property t a specific price if done so within a specific time period

102
Q

origination fee

A

fees assessed to the borrower that cove loan expenses related to the title, appraisal and credit checks

103
Q

package mortgage

A

a combination loan that covers both the residence and the land

104
Q

participation mortgage

A

a loan that permits the holder to receive a portion of the profits from the property

105
Q

percentage lease

A

a rental payment determined by sales volume of the renter with a minimum rental amount

106
Q

prescription

A

receiving the right to a property through common use, such as a squatter, or adverse possession

107
Q

primary mortgage market

A

the original buyer of a loan, such as a bank or savings and loan, which may then be sold on the secondary mortgage market for a profit

108
Q

prime rate

A

the lowest available rate a lending institution charges on a short term loans to businesses

109
Q

procuring cause

A

a method of deciding if the real estate agent earned a commission, legal expression that means the goal was realized through the actions

110
Q

quitclaim deed

A

a release of rights in a property without confirming the validity or the rights of the person who keeps the deed

111
Q

real estate settlement procedures act (RESPA)

A

a law that informs buyers of their rights by requiring the lender to give updated information to the borrower throughout the home buying process

112
Q

regulation Z

A

federal requirement that a lender must disclose all terms of a loan, including the APR

113
Q

rescission

A

the negating of a contract so that it is no longer in effect

114
Q

reversion

A

the landlords right to take possession of rental property when the rental agreement ends

115
Q

reverse annuity mortgage

A

a property loan used for a person with high equity when the lender makes yearly payments to the home owner

116
Q

right of redemption

A

the owner’s privilege to take possession of real estate when the financial obligations of the loan have been met, even during the process of a foreclosure

117
Q

sale-leaseback

A

the sale of the real estate to to new owner and the new owner rents the real estate back to the original owner

118
Q

seisin

A

the owner who holds the title to the property free and clear

119
Q

servient tenement

A

property that gives shred use of land to a neighboring property for their good

120
Q

special warranty deed

A

a deed that pertains only to the title under the person issuing it, not to any title issues from pervious title holders

121
Q

specific lien

A

a mortgage or lien against only a specified part of the real estate

122
Q

statutory lien

A

a legal obligation on the property, such as taxes

123
Q

steering

A

illegal action when only certain racial or cultural groups are shown a property

124
Q

tax deed

A

a legal document that places claim on real estate because of owed taxes

125
Q

tax lien

A

a hold placed on a real estate because of owed taxes prior to filing the tax deed

126
Q

tenancy at sufferance

A

a renter who can no longer legally remain on the property because the lease has ended

127
Q

tenancy at will

A

an agreement the owner provided to the renter that ends upon if and when the landlord decided to end it. the renter can also terminate the lease

128
Q

tenancy by entirety

A

equal rights to property shared between spouses, the real estate passes to the surviving spouse upon death of spouse

129
Q

tenancy in common

A

equal rights to property shared between individuals without surviving rights but determined through a will upon one parties death

130
Q

testate

A

someone who does with a legal will in place

131
Q

useful life

A

the period of time during which improvements with yield income

132
Q

valuation

A

estimation of the price of real estate

133
Q

void contract

A

a written agreement that cannot be enforced even when signed

134
Q

voidable contract

A

a written agreement that becomes unenforceable after it is signed

135
Q

wraparound mortgage

A

merges a new loan with an existing loan. a property loan that combines a first mortgage with a second mortgage at a higher loan amount and higher payment

136
Q

warranty deed

A

a legal right of protection against any type of claim

137
Q

Package Mortgage

A

Personal property and real estate are used as collateral.

138
Q

Junior Mortgage

A

Loan in addition to the primary mortgage.

139
Q

equity loan

A

a second mortgage. it is used to access the equity in the home.

Real Estate Test (2 decks)

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