Real Estate - Key Terms

Question 1

ABANDONMENT

Answer 1

THE FAILURE TO OCCUPY AND USE THE PROPERTY THAT MAY RESULT IN A LOSS OF RIGHTS

Question 2

ABATEMENT OF NUISANCE

Answer 2

EXTINCTION OR TERMINATION OF A NUISANCE

Question 3

ABSTRACT OF JUDGMENT

Answer 3

A CONDENSATION OF THE ESSENTIAL PROVISIONS OF A COURT JUDGMENT

Question 4

ABSTRACT OF TITLE

Answer 4

A SUMMARY OR DIGEST OF ALL TRANSFERS, CONVEYANCES, LEGAL PROCEEDINGS, AND ANY OTHER FACTS RELIED ON AS EVIDENCE OF TITLE, SHOWING CONTINUITY OF OWNERSHIP, TOGETHER WITH ANY OTHER ELEMENTS OF RECORD WHICH MAY IMPAIR TITLE

Question 5

ABSTRACTION

Answer 5

A METHOD OF VALUING LAND. THE INDICATED VALUE OF THE IMPROVEMENT IS DEDUCTED FROM THE SALES PRICE

Question 6

ACCELERATED COST RECOVERY SYSTEM

Answer 6

THE SYSTEM FOR FIGURING DEPRECIATION (COST RECOVERY) FOR DEPRECIABLE REAL PROPERTY ACQUIRED AND PLACED INTO SERVICE AFTER JANUARY 1, 1981 (ACRS)

Question 7

ACCELERATED DEPRECIATION

Answer 7

A METHOD OF COST WRITE-OFF IN WHICH DEPRECIATION ALLOWANCES ARE GREATER IN THE FIRST FEW YEARS OF OWNERSHIP THAN IN SUBSEQUENT YEARS. THIS PERMITS AN EARLIER RECOVERY OF CAPITAL AND A FASTER TAX WRITE-OFF OF AN ASSET

Question 8

ACCELERATION CLAUSE

Answer 8

A condition in a real estate financing instrument giving the lender the power to declare all sums owing lender immediately due and payable upon the happening of an event, such as sale of the property, or a delinquency in the repayment of the note.

Question 9

ACCEPTANCE

Answer 9

The act of agreeing or consenting to the terms of an offer thereby establishing the “meeting of the minds” that is an essential element of a contract.

Question 10

ACCESS RIGHT

Answer 10

The right of an owner to have ingress and egress to and from owner’s property over adjoining property.

Question 11

ACCESSION

Answer 11

An addition to property through the efforts of man or by natural forces.

Question 12

ACCRETION

Answer 12

Accession by natural forces, e.g., alluvium.

Question 13

ACCRUED DEPRECIATION

Answer 13

The difference between the cost of replacement new as of the date of the appraisal and the present appraised value.

Question 14

ACCRUED ITEMS OF EXPENSE

Answer 14

Those incurred expenses which are not yet payable. The seller’s accrued expenses are credited to the purchaser in a closing statement.

Question 15

ACKNOWLEDGMENT

Answer 15

A formal declaration made before an authorized person, e.g., a notary public, by a person who has executed an instrument stating that the execution was his or her free act. In this state an acknowledgment is the statement by an officer such as a notary that the signatory to the instrument is the person represented to be.

Question 16

ACOUSTICAL TILE

Answer 16

Blocks of fiber, mineral or metal, with small holes or rough-textured surface to absorb sound, used as covering for interior walls and ceilings

Question 17

ACQUISITION

Answer 17

The act or process by which a person procures property.

Question 18

ACRE

Answer 18

A measure of land equaling 160 square rods, or 4,840 square yards, or 43,560 square feet, or a tract
about 208.71 feet square

Question 19

ACTUAL AUTHORITY

Answer 19

Authority expressly given by the principal or given by the law and not denied by the principal.

Question 20

ACTUAL FRAUD

Answer 20

An act intended to deceive another, e.g., making a false statement, making a promise without intending to perform it, suppressing the truth.

Question 21

ADDENDUM

Answer 21

Additional pages of material that are added to and become part of a contract

Question 22

ADJUSTABLE RATE MORTGAGE (ARM)

Answer 22

A mortgage loan which bears interest at a rate subject to
change during the term of the loan, predetermined or otherwise.

Question 23

ADJUSTMENTS

Answer 23

In appraising, a means by which characteristics of a residential property are regulated by
dollar amount or percentage to conform to similar characteristics of another residential property.

Question 24

ADMINISTRATOR

Answer 24

A person appointed by the probate court to administer the estate of a deceased person
who died intestate.

Question 25

AD VALOREM

Answer 25

A Latin phrase meaning “according to value.” Usually used in connection with real estate
taxation.

Question 26

ADVANCE

Answer 26

Transfer of funds from a lender to a borrower in advance on a loan

Question 27

ADVANCE COMMITMENT

Answer 27

The institutional investor’s prior agreement to provide long-term financing upon completion of construction; also known as a “take-out” loan commitment.

Question 28

ADVANCE FEES

Answer 28

A fee paid in advance of any services rendered. Sometimes unlawfully charged in connection with that illegal practice of obtaining a fee in advance for the advertising of property or businesses for sale, with no intent to obtain a buyer, by persons representing themselves as real estate licensees, or representatives of licensed real estate firms

Question 29

ADVERSE POSSESSION

Answer 29

A method of acquiring title to real property through possession of the property for a statutory period under certain conditions by a person other than the owner of record

Question 30

AFFIANT

Answer 30

One who makes an affidavit or gives evidence.

Question 31

AFFIDAVIT

Answer 31

A statement or declaration reduced to writing sworn to or affirmed before some officer who
has authority to administer an oath or affirmation.

Question 32

AFFIDAVIT OF TITLE

Answer 32

A statement, in writing, made under oath by seller or grantor, acknowledged before a Notary Public in which the affiant identifies himself or herself and affiant’s marital status certifying
that since the examination of title on the contract date there are no judgments, bankruptcies or divorces, no unrecorded deeds, contracts, unpaid repairs or improvements or defects of title known to affiant and that
affiant is in possession of the property

Question 33

AFFIRM

Answer 33

To confirm, to aver, to ratify, to verify. To make a declaration.

Question 34

AGENCY

Answer 34

The relationship between principal and the principal’s agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party.

Question 35

AGENT

Answer 35

One who acts for and with authority from another called the principal.

Question 36

AGREEMENT

Answer 36

An exchange of promises, a mutual understanding or arrangement; a contract.

Question 37

AGREEMENT OF SALE

Answer 37

A written agreement or contract between seller and purchaser in which they
reach a “meeting of minds” on the terms and conditions of the sale. The parties concur; are in harmonious
opinion.

Question 38

ALIENATION

Answer 38

ALIENATION — The transferring of property to another; the transfer of property and possession of lands, or
other things, from one person to another.

Question 39

ALIENATION CLAUSE

Answer 39

A clause in a contract giving the lender certain rights in the event of a sale or other transfer of mortgaged property.

Question 40

ALLODIAL TENURE

Answer 40

A real property ownership system where ownership may be complete except for those rights held by government. Allodial is in contrast to feudal tenure.