Real Estate Principles Glossary

Question 1

Abandonment

Answer 1

The termination of an easement when easement holders actions demonstrate clear intent to permanently abandon all future use of easement

Question 2

Absolute privilege publication

Answer 2

Any publication during a judicial proceeding which is authorized by law bars a slander of title action against the person wrongfully claiming an interest in the property

Question 3

Abstract of judgment

Answer 3

A condense written summary of the essential holdings of a court judgment

Question 4

Acceleration

Answer 4

When a lender or carryback seller demands for immediate payment of amounts remaining due on the loan or extension of credit also known as calling the loan

Question 5

Actual money losses

Answer 5

Money losses recovered for injury to real estate, lost use of the property, personal injury or injury to the occupant’s personal property

Question 6

ad valorem taxes

Answer 6

Real estate taxes imposed on property based on its assessed value

Question 7

Adjustable-rate mortgage (ARM)

Answer 7

A variable interest rate note with the rate of interest adjusted based on a selected index often starting out with an introductory teaser rate and then resetting at a higher rate in a few months or years

Question 8

Administrative agencies

Answer 8

A government entity created by the state legislators and local governing bodies to oversee specialize matters. Most have legislative executive and judicial authority

Question 9

Adjusted gross income (AGI)

Answer 9

A taxpayers total net income of expenses and deductions from all three income categories

Question 10

Adverse possession

Answer 10

A method of acquiring title two real estate by openly maintaining exclusive possession of the property for a period of five years in pain all property taxes

Question 11

Abstract of title

Answer 11

An accurate factual representation of title to the property being acquired encumbered release

Question 12

Affiliated business arrangement (ABA)

Answer 12

Referral of a client to a financial controlled business whose earnings are shared with the broker

Question 13

Affirmative covenant

Answer 13

A recorded restriction limiting the use of property to a specific purpose. For example can only be used for a school, railroad or highway

Question 14

Agency confirmation provision

Answer 14

A provision and all purchase agreements and counteroffers disclosing the agency of each broker in the transaction.

Question 15

Agency law disclosure

Answer 15

Reinstatement of agency codes in cases which establish the conduct of real estate licenses. it is delivered to all parties and targeted transactions when listing, selling, buying or leasing for a term greater than one year. Property containing 1 to 4 residential units, mobile home or commercial properties

Question 16

Agency relationship

Answer 16

The scope of activities imposed on the broker by law as arising out of the representation authorized by the employment

Question 17

Agent

Answer 17

One who is authorized to represent another such as a broker and client or sales agent and their broker

Question 18

Agreed- boundary doctrine

Answer 18

When owners of adjacent properties uncertain over the true boundaries agreed to establish the location of their common lot line and acquiesce to the boundary line for at least five years

Question 19

All-inclusive trust deed (AITD)

Answer 19

A note executed by the buyer in favor of the seller for payment of the amount remaining due on the purchase price after deducting the down payment the seller remaining responsible for payment on one or more of the underlying trustee deed obligation. It is also referred to as a wraparound or overriding note

Question 20

Alquist-Priolo MAps

Answer 20

Maps which identify earthquake fault areas available from state mining and geological board the city or county planning department

Question 21

Amendment clause

Answer 21

A clause contained in covenants conditions and restrictions (CCR’s) establishing a procedure for modifying the (CCR’s)

Question 22

Amortization table

Answer 22

A schedule of monthly loan payments showing amount of principal and the amount of interest which comprises each constant payment until the loan is paid in full

Question 23

Annual property operating data (APOD)

Answer 23

A document presenting income and expenses incurred by income property to analyze suitability for investment

Question 24

Anti-deficiency

Answer 24

A limitation placed on a mortgage lender’s ability to recover losses on a default when the secured property’s values is insufficient to satisfy the mortgage debt

Question 25

Applicable federal rate (AFR)

Answer 25

Rates set by the Internal Revenue Service for carryback sellers to impute and report as minimum interest income when the note rate on the carryback death is a lesser rate

Question 26

Appraisal

Answer 26

An individual’s opinion of property value on a specific date documented in an appraisal report

Question 27

Appraisal report

Answer 27

Documentation of an appraiser’s findings including the purpose and scope of the appraisals property description and opinion of value

Question 28

Appurtenant easement

Answer 28

A type of easement which is incidental to the ownership and belongs to the property which benefits from its use

Question 29

Appurtenant rights

Answer 29

Incidental property rights which are not located on the real estate nor reflected on its title including the rights of ingress and egress across adjoining properties

Question 30

Area

Answer 30

The amount of space within the boundaries of a parcel of real estate

Question 31

As is clause

Answer 31

An unforeseeable provision stating the buyer accepts the property without a full disclosure of known conditions. Properties are sold “as disclosed”, never “as is”

Question 32

Associate license

Answer 32

A sales agent employed by a broker

Question 33

Assumption agreement

Answer 33

A promise given by the buyer to the seller or a lender to perform all terms of the mortgage taken over by the buyer on the sale